Defense Department employee arrested in Navy bribery scheme

SAN DIEGO (AP) — A former senior Defense Department employee was arrested Tuesday on allegations he accepted hundreds of thousands of dollars in exchange for helping a Malaysian defense contractor, in one of the Navy's worst corruption cases.

Paul Simpkins was arraigned Tuesday in Haymarket, Va., on a charge of conspiracy to commit bribery in connection to a scheme to steer lucrative Navy contracts to Singapore-based Glenn Defense Marine Asia or GDMA and stave off competitors, according to the complaint filed in federal court in the Eastern District of Virginia.

Simpkins, the Navy's former senior federal contracting officer could not be reached for comment, nor could his defense lawyer.

"With the arrest of Paul Simpkins, who was recently among the Defense Department's high ranking civilians, we have uncovered yet another tentacle of this pervasive bribery scheme," said U.S. Attorney Laura Duffy, whose office is seeking for Simpkins be sent to San Diego to face charges. "The more we learn about the extent of the greed and corruption, the more determined we are to eviscerate it."

The complaint alleges that Simpkins accepted several hundred thousand dollars in cash and wire transfers, travel and the services of prostitutes in exchange for getting Navy contracts for GDMA, which has supplied food, fuel and other supplies to Navy vessels at Asian ports for 25 years.

According to a criminal complaint, Francis paid Simpkins by hand-delivering over $150,000 in cash and by making several wire transfers to a bank account held in the name of Simpkins's wife at the time. Simpkins allegedly used an email account belonging to his mistress to advise Francis of the routing and account information of the bank account belonging to his wife, according to prosecutors.

Simpkins, who held several manager-level contracting positions in the federal government, allegedly used his influence to benefit GDMA in getting husbandry contracts for Navy ships in Thailand and the Philippines, the complaint alleges.

The arrest comes only weeks after the case's central figure, GDMA's chief executive officer Leonard Glenn Francis, pleaded guilty in federal court in San Diego to buying off U.S. military officials with everything from cash and prostitutes to luxury travel.

Known in military circles as "Fat Leonard" because of his large size, Francis and his firm obtained classified information that allowed his company to overbill the U.S. military by at least $20 million, according to the plea agreement. Francis has acknowledged bribing officials with more than $500,000 in cash and a staggering amount of luxury goods worth millions. The goods included spa treatments, top-shelf alcohol, designer handbags, leather goods, designer furniture, watches, fountain pens, ornamental swords and handmade ship models, according to court documents.

In exchange, Navy officers re-routed ships to ports owned by Francis and helped him boost his business. Francis faces up to 25 years in prison and is scheduled to be sentenced in April.

So far, seven people, including Francis and three Navy officers, have entered guilty pleas, and prosecutors say the probe is far from over. Cmdr. Michael Vannak Khem Misiewicz has pleaded not guilty to bribery charges.

Prosecutors say Simpkins also interceded on GDMA's behalf in contract disputes with the Navy. In 2006, when Simpkins's subordinate recommended that GDMA's husbanding contract in Thailand not be extended because of "many exceedingly high cost" items, Simpkins allegedly overruled his subordinate and extended it, according to the complaint.

Simpkins allegedly instructed U.S. Navy officials in Hong Kong to discontinue the use of meters that monitored the volume of liquid waste that GDMA removed from Navy ships, the complaint alleges. The use of meters is to ensure proper accounting of the amount of waste removed and prevent overbilling. Simpkins also asked a Navy official not to review invoices that GDMA submitted in connection to a recent port call in Hong Kong after Francis complained that U.S. Navy personnel were asking questions.